What are Late Fees On Credit Cards
Late fees on credit cards are fees charged when your payment is received after the due date or, with some loans, after the payment grace period.
When you have a balance on your credit card, your payment is due to a minimum of 21 days after the end of your billing cycles. Making a payment after your due date or making less than the minimum payment, attracts a late fee.
Some credit cards have tiered late fees depending on the credit card balance. Other credit cards have a fixed late fee, regardless of the balance on the credit card.
The Maximum Credit Card Late Fee
The law restricts credit card issuers to what they should charge as a late fee. Credit card issuers can charge a maximum late fee of $25 the first time you’re late or up to $35 if you’ve defaulted on your payment within the past six months.
Late Fees On Other Accounts
You can also get charged a late fee on loans and lines of credit. If you default before your next billing cycle ends, your next minimum payment will include the regular minimum payment, the late fee, and any past due payment from the previous billing cycle.
Some type of account with a payment due date charges a late fee if your payment is not made by the due date.
Avoiding A Late Fee
Here’s how to avoid late fees completely;
- Make the full minimum payment before the due date. This you can do by scheduling payments through the credit card issuer’s website or via your bank’s online bill pay.
- Make a mental note of when your next payment is due, mostly you’re paying on the due date. Cross-check with your credit card issuer to know the exact time your payment is due.
- You can also avoid a late payment fee by making an expedited payment online or through telephone when it’s close to your due date. Lenders often charge an extra fee for expedited payments, especially if a customer service representative processes your payment to help you avoid a late fee.
You can avoid late payment fees with the responsible use of your card. All you need to do is make your payments on time and note down your next due date and you are good to go.